the san diego metropolitan transit system a study of its … · 2019. 12. 2. · page 3 of 34 san...

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THE SAN DIEGO METROPOLITAN TRANSIT SYSTEM

A STUDY OF ITS ECONOMIC IMPACT

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THE FERMANIAN BUSINESS & ECONOMIC INSTITUTE (FBEI)

The FBEI specializes in providing a variety of business and economic

consulting services to employers, for profit and nonprofit companies,

individuals, organizations, government entities, and others throughout the San

Diego Region, as well as nationally and internationally. Consulting services

include economic analysis and forecasting, economic impact studies, business

plans, customer and consumer trends, market research, feasibility studies,

expert opinion, and many other contemporary needs of the business and

economic community, public and private, for-profit and non-profit. The Institute

also has extensive experience in presenting materials to government officials

at all levels and in conducting interviews with local and national media outlets.

FBEI Authors

Lynn Reaser, PH.D., CBE – Chief Economist

Thomas Hale - Senior Research Associate

Sarah DiSalvo, Nathaniel Hosmer, Jake Bikle, Aidan MacCuish

PLNU Undergraduate Student Researchers

Copyright © 2019 by Point Loma Nazarene University. All rights reserved.

Point Loma Nazarene University and the Fermanian Business & Economic

Institute disclaim any and all liability from the use of this material. Publication or

distribution of any portion of this document is prohibited without the express

approval of the Fermanian Business & Economic Institute and the San Diego

Metropolitan Transit System.

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EXECUTIVE SUMMARY

Including all of the ripple or multiplier effects, San Diego Metropolitan Transit System-

related activities generated an estimated $1.0 billion of gross regional product (GRP) in

FY 2018. MTS was directly or indirectly responsible for nearly 13,000 of the total number

of jobs and approximately $625 million in total personal income.

With operating expenses and capital outlays totaling $364 million in FY 2018, every

dollar of direct MTS spending yielded a total of about $2.82 in GRP.

San Diego’s MTS contributes significantly to decreasing the region’s carbon footprint

and achieving its Climate Action Plan goals. In FY 2018, MTS reduced the region’s

carbon dioxide (CO2) emissions by 97,000 metric tons. In dollar terms, this

environmental savings amounted to $13.6 million.

In FY 2018, total savings accruing to San Diego MTS users totaled an estimated $861

million. These savings went primarily to lower income households who represent the

majority of MTS riders.

MTS is 133 years old, originating as an open air street car led by two mules or horses.

Today MTS trolleys and buses travel 29 million miles per year and deliver 85 million

passenger trips.

Financially, the San Diego MTS outperforms all of the other 15 largest metropolitan

areas. It has the highest cost recovery rate and the lowest expense ratios relative to

either miles traveled or the total number of passenger trips.

San Diego’s MTS serves all ethnic groups. Hispanics account for about 40% of riders.

Men represent a slightly greater share of MTS ridership than women at 56% versus

44%.

MTS provides discounted fares or special services on 22 million passenger trips for

senior citizens, disabled persons, or individuals on Medicare.

San Diego’s MTS provides transportation particularly for lower-income groups. About

one-fifth of riders earn less than $15,000 per year.

San Diego MTS ridership peaked in Fiscal Year 2015 (FY 2015) and has drifted lower in

recent years along with the rest of the nation. A slight pickup has taken place in FY

2019.

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San Diego’s MTS affects the economy through a number of channels. These include its

direct effect on jobs, local companies providing goods and services to MTS, capital

spending, savings to consumers, productivity gains for business, safety, tourism, cross-

border transportation, and real estate development.

San Diego’s public transit provides major support to the region’s tourist industry. In FY

2018, it provided 381,000 trips for Comic-Con attendees and 280,000 trips for baseball

fans attending Padres games.

MTS provides a vital link between employers and workers living in Mexico. In FY 2018,

about 19,000 bus or trolley trips per day were made from San Ysidro or Otay Mesa.

With the reduction of losses from car accidents including death, injury, or property

damage, MTS enabled an estimated savings of $6.1 million from greater safety in FY

2018.

Exhibit A

MTS Budget $ 317 million

Jobs 12,900

Income $ 626 million

Gross Regional Product $ 1.0 billion

CO2 Reduction $ 13.6 million

MTS Represents SizableEconomic Force

Fiscal Year 2018 estimate

Source: FBEI

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TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

EXHIBIT A: MTS Represents Sizable Economic Force . . . . . . . . . . . . . . . . . . . 3

STUDY PURPOSE AND SCOPE 5

BACKGROUND 5

EXHIBIT 1: MTS in 1886 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

EXHIBIT 2: 2018 MTS Trolley Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

DEMOGRAPHICS 6

EXHIBIT 3: MTS Serves a Diverse Range of People . . . . . . . . . . . . . . . . . . 6

EXHIBIT 4: Men are more likely to use MTS. . . . . . . . . . . . . . . . . . . . . . . 6

EXHIBIT 5: MTS Serves the Fiscally Challenged . . . . . . . . . . . . . . . . . . . . 7

EXHIBIT 6: Working-Age Individuals Comprise the Majority of MTS Riders. . . . . . . 7

EXHIBIT 7: MTS Spans a Range of Cities. . . . . . . . . . . . . . . . . . . . . . . . 7

EXHIBIT 8: College Ridership Trends Higher . . . . . . . . . . . . . . . . . . . . . . 7

RIDERSHIP TRENDS 8

EXHIBIT 9: San Diego Ridership Off Less than the Nation . . . . . . . . . . . . . . . 8

EXHIBIT 10: MTS Ridership Split between Buses and Trolleys. . . . . . . . . . . . . 8

EXHIBIT 11: San Diego Bus Ridership Drop Less than the U.S. . . . . . . . . . . . . 8

EXHIBIT 12: U.S Rail Ridership Stronger than San Diego Trolley’s. . . . . . . . . . . 8

FINANCIAL PERFORMANCE 9

EXHIBIT 13: San Diego MTS Fare/Expense Ratio Ranks Highest Among Major Cities. 9

EXHIBIT 14: San Diego MTS Costs per Passenger Trip Lowest Among Major Cities . . 9

EXHIBIT 15: San Diego MTS per Mile Cost Half Major City Average. . . . . . . . . . . 9

CHANNELS OF INFLUENCE 10

EXHIBIT 16: MTS and Contractors Employ Nearly 3,000 Workers . . . . . . . . . . . 10

EXHIBIT 17: San Diego Transit Users Save Over $11,000 per Year . . . . . . . . . . 11

EXHIBIT 18: MTS Support Tourism Industry. . . . . . . . . . . . . . . . . . . . . . . 12

EXHIBIT 19: MTS Meets Cross-Border Demand. . . . . . . . . . . . . . . . . . . . . 12

EXHIBIT 20: Auto Accidents Take a Toll on San Diego . . . . . . . . . . . . . . . . . 13

EXHIBIT 21: San Diego’s Bus Fleet Shifts to Cleaner Fuel Sources. . . . . . . . . . . 14

EXHIBIT 22: MTS Climate Savings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

THE TOTAL ECONOMIC IMPACT 15

EXHIBIT 23: MTS Channels are Widespread . . . . . . . . . . . . . . . . . . . . . . 15

EXHIBIT 24: MTS Direct Effects Expand Beyond Starting Point. . . . . . . . . . . . . 15

EXHIBIT 25: MTS Represents Sizeable Economic Force . . . . . . . . . . . . . . . . 16

EXHIBIT 26: MTS Returns $2.82 per Dollar . . . . . . . . . . . . . . . . . . . . . . . 16

CONCLUSION 17

APPENDICES 18

APPENDIX A: Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

APPENDIX B: Literature Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

APPENDIX C: References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

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STUDY PURPOSE AND SCOPE

This report seeks to assess the total economic impact of the San Diego Metropolitan Transit

System on San Diego’s economy by analyzing the results of FY 2018. As the region considers

the future of transportation, it is important for policymakers, business leaders, and residents to

know the economic linkages and effects of its transit system.

The report traces all of the channels through which MTS affects the economy. These include its

direct effect on jobs, local companies providing goods and services to MTS, capital spending,

savings to consumers, productivity gains for business, safety, tourism, cross-border

transportation, and real estate development. It also analyzes the impact on the region’s

greenhouse (GHG) emissions and Climate Action Plans.

The combination of these various channel effects yields estimates of the total impact of MTS on

San Diego County’s gross regional product (GRP), total employment, and personal income.

The report examines the demographics of MTS ridership in terms of its geographic usage,

income levels, and ethnic composition. It analyzes historical trends of MTS ridership compared

with national averages. The study also examines the financial performance of San Diego’s MTS

compared with that of transit systems in other major metropolitan areas.

Finally, the study examines the findings of other research conducted on public transit systems

throughout the country.

BACKGROUND

The San Diego Metropolitan Transit System (MTS) dates back to July 3, 1886, beginning life as

the San Diego Street Car Company. It debuted as an open air street car led by two mules or

horses with a maximum speed of five miles an hour. It expanded to five lines running between

what are today Market Street, F Street,

Broadway, First Street, and Fifth Street. These

operations involved six cars and 20 horses and

cost five cents per ride. In today’s dollars, that

would amount to $3.90 versus a typical current

one-way fare of $2.25 to $2.50.1

Today MTS, through its light rail and bus

network, serves San Diego County’s urbanized

areas and the rural areas in the eastern part of

the County. In total, its coverage spans 3,240

square miles.

1 Metropolitan Transit System, U.S. Bureau of Labor Statistics, FBEI.

Exhibit 1

The MTS in 1886

Source: SDMTS; FBEI

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San Diego’s transit system operates through two major channels:

Light rail service, operated by San

Diego Trolley, Inc. (SDTI),

comprises 53 stations on 54.3 miles

of track. It operates four lines

(Orange, Green, Silver, and UC San

Diego Blue Lines).

Bus service, provided by the San

Diego Transit Corporation (SDTC)

and private contractors, operates

with 100 fixed routes as well as

special paratransit service for

disabled individuals (MTS Access).

Fixed-route services encompass

urban, rural, and express corridors.

In Fiscal Year 2018 (July 1, 2017-June 30, 2018), MTS saw 85 million passenger trips. MTS

vehicles covered 29 million miles and operated a total of 1.7 million hours. MTS in Fiscal Year

2018 (FY 2018) provided discounted fares or special services on 22 million passenger trips for

senior citizens (60 years and older), disabled persons as designated under the Americans for

Disabilities Act (ADA), or individuals on Medicare.

In FY 2018, the MTS operating budget was $279 million. This provided 2,750 full-time and

another 195 part-time jobs, including positions created by firms under contract with MTS.2

DEMOGRAPHICS

MTS serves all ethnic groups. Hispanics account for about 40% of riders. They are followed by

Whites at about 30%, African-Americans at around 15%, and Asians at 8%.

Men represent a slightly greater share of MTS ridership than women. About 56% of all riders are

male versus the 44% who are female.

2 MTS Adopted Fiscal Year 2019 Budget.

Exhibit 2

Source: SDMTS; FBEI

Blue Line - Operates from the San Ysidro Transit Center through South County communities to America Plaza via The Center City corridor. 15.4 miles. 18 stations.

Orange Line - Operates from the El Cajon Transit Center through East County communities to the Santa Fe Depot via the Center City corridor. 18.0 miles. 19 stations.

Green Line - Operates from the Santee Transit Center through Mission Valley to 12th and Imperial Transit Center via the bayside corridor. 23.6 miles. 27 stations.

Silver Line - Operates on a limited basis on the downtown loop from 12th & Imperial Transit Center along the bayside to C Street and Park Boulevard. 2.7 miles. 9 stations.

2018 MTS Trolley Lines

Hispanic 41%

MTS Serves a DiverseRange of People

Percent

Exhibit 3

Source: SANDAG 2015 On-Board Transit Passenger Survey; FBEI

White 29%

African American

14%

Two or More Ethnicities

6%

Pacific Islander

1%

Native American

1%

Asian8%

Men are more likely to use MTSPercent

Exhibit 4

Female44%

Male56%


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San Diego’s MTS provides transportation particularly for lower-income groups. About one-fifth of

riders earn less than $15,000 per year. Nearly three-fifths make less than $50,000 per year.

While MTS can serve a variety of transportation uses, such as shopping or traveling to sports or

other entertainment, commuting to work represents the dominant function. Working-age

individuals, with ages ranging from 18 to 64 years, represent over 90% of total ridership. The

youngest of this group, aged 18-24, are 30% of the total, followed closely by the 25-34 age

group at 27%.

San Diego’s MTS offers transportation to a number of cities where it operates. In FY 2018,

National City, Lemon Grove, and the City of San Diego experienced the highest transit usage

per person. National City led with an average annual count of 50 rides per person, followed by

Lemon Grove at 46 rides, and the City of San Diego at 43 rides. La Mesa, El Cajon, and Chula

Vista all showed per capita ridership rates of over 25.

MTS has expanded its base among college students. Traffic congestion near campuses, scarce

parking, education and other educational expenses, and environmental concerns have

increased ridership. In 2014, a student-led referendum at UC San Diego, which provided transit

passes for all students as part of tuition packages, was approved. In April 2018, UC San Diego

students approved a six-year extension for the Triton U-Pass, with 72% of the vote. In FY 2018,

regular college ridership totaled 4.8 million in terms of the number of passenger trips taken

during the year. UC San Diego students represented about three-fourths of the total.

1.6%2.9%

5.0%5.8%

6.2%6.5%

8.4%8.7%

9.4%8.3%8.4%8.4%

20.5%

0% 5% 10% 15% 20%

$150,000 or above

$100,000-$149,999

$75,000-$99,999

$60,000-$74,999

$50,000-$59,999

$45,000-$49,999

$40,000-$44,999

$35,000-$39,999

$30,000-$34,999

$25,000-$29,999

$20,000-$24,999

$15,000-$19,999

Less than $15,000

Exhibit 5

MTS Serves the Fiscally ChallengedPercent


1.0%2.9%

30.5%27.1%

20.4%

12.8%

4.9%

0.4%0%

10%

20%

30%

Age0-15

Age16-17

Age18-24

Age25-34

Age35-49

Age50-64

Age65-79

Age80+

Exhibit 6

Working-Age Individuals Comprisethe Majority of MTS Riders

Percent


49.6

45.6

43.1

34.8

32.9

30.9

27.0

21.4

16.9

6.1

2.4

2.1

0.0 10.0 20.0 30.0 40.0 50.0

National City

Lemon Grove

San Diego City

La Mesa

El Cajon

All Cities Total

Chula Vista

Coronado

Imperial Beach

Santee

Poway

Unincorporated

San Diego City

Exhibit 7

MTS Spans a Range of CitiesRides per capita, Fiscal Year 2018

Source: SDMTS; California Dept. of Finance Demographic Research Unit; FBEI

All Cities Total

Exhibit 8

3.0

4.0

5.0

2010 2012 2014 2016 2018

4.8

Source: SDMTS; FBEI

College Ridership Trends HigherMillions of passenger rides*

* UC San Diego Triton U-Pass + MTS monthly college passes

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RIDERSHIP TRENDS

San Diego MTS ridership peaked in FY 2015 and has drifted lower in recent years. This is

consistent with national trends, which have also softened. The decline in oil prices from over $100

a barrel in 2014 and improving economic conditions have led people back to their cars. Relative to

the end of the 2007-09 recession, San Diego MTS ridership has declined 7.2% versus a 10.9%

drop nationally. San Diego MTS ridership improved slightly in the first half of FY 2019.

Of the 85 million passenger trips taken on MTS during FY 2018, 48 million, or 56%, were by

bus. The bus share of trips has decreased from the 65% reached in FY 2013. Trolley’s 44%

share of FY 2018 was up from its 35% of FY 2013.

Bus ridership on San Diego MTS has followed national trends, although its drop over the past

several years has been less than the rest of the country. Between FY 2009 and FY 2018 bus

ridership in San Diego declined 12.2% versus a U.S. drop of 14.4%. San Diego bus ridership

reached its high point in FY 2015 and has fallen lower since that time, although it picked up

about 1% through May of FY 2019. Nationally, ridership achieved its highest point in FY 2012.

Trolley ridership on the San Diego MTS has decreased from its high point in FY 2015, although

ridership edged up about 1% through May of FY 2019. Nationally, passenger trips by commuter

or light rail increased steadily from FY 2009 to their peak in FY 2017.

San Diego Ridership Off Less than the NationIndex, 2009 = 100

Exhibit 9

80

85

90

95

100

105

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

San Diego

Source: APTA; SDMTS; FBEI

U.S.

San Diego Bus Ridership Drop Less than the U.S.

Index, 2009 = 100

Exhibit 11

80

85

90

95

100

105

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

San Diego

U.S.


U.S. Rail Ridership Stronger than San Diego Trolley’s

Index, 2009 = 100

Exhibit 12

75

80

85

90

95

100

105

110

115

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

San Diego

U.S.


MTS Ridership Split between Buses and Trolleys

Passenger trips, Fiscal Year 2018

Exhibit 10

Source: SDMTS; FBEI

Total = 85 million

TROLLEY37 million

Bus48 million

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FINANCIAL PERFORMANCE

Reflecting their objectives to offer residents a more efficient form of transportation, along with

environmental and other benefits discussed earlier in this report, almost no public transit system

operates in the black. Rider fares pay for only part of the expense, although advertising, interest

earnings, and rental income provide some additional revenue. Federal, state, and local funds fill

the gap between total operating expense and revenue.

In FY 2017, San Diego MTS covered

34.7% of its total operating expense with

fare collections. This was the highest

ratio of the 15 largest metropolitan areas

when the costs of operating bus, light,

and commuter rail systems are

compared. Aside from San Diego, only

Chicago and Philadelphia covered more

than 30% of their expenses with fares.

San Diego’s ratio was significantly higher

than the 15-city average of 18.8%.

Operating expense per passenger trip

equaled $3.05 in FY 2017 for the San

Diego MTS. Chicago, with a cost of

$3.25 per trip, and San Francisco at

$3.63 were the only other two cities

among the 15 largest metropolitan areas

with expenses less than $4.00 per trip.

San Diego’s cost per passenger trip was

$2.75 under the 15-city average of $5.80.

San Diego’s operating expense relative

to total miles traveled was the lowest

among all of the 15 largest metropolitan

areas at $ 0.64 per mile. Only Dallas and

Los Angeles had expenses per mile that

were also below $1.00 per mile. San

Diego’s average cost per mile was less

than one-half the 15-city average.

Compared with all of the nearly 500

transit districts throughout the country,

San Diego’s MTS ranked close to or over

the 90th percentile in terms of all three of

the financial performance metrics

discussed above.

18.8%

34.7%

0% 10% 20% 30% 40%

San JoseAustin

San AntonioHouston

JacksonvilleDallas

ColumbusIndianapolis

PhoenixLos Angeles

AverageSan Francisco

New YorkPhiladelphia

ChicagoSan Diego

Source: Federal Transit Administration; FBEI

San Diego MTS Fare/ExpenseRatio Ranks Highest Among Major Cities*

Percent

Exhibit 13

* FY 2017, major metropolitan areas

San Diego

Average

$5.80

$3.05

$0.00 $2.00 $4.00 $6.00 $8.00 $10.00

San JoseJacksonvilleIndianapolis

ColumbusDallasAustin

HoustonAverage

San AntonioPhiladelphia

New YorkPhoenix

Los AngelesSan Francisco

ChicagoSan Diego


San Diego MTS Costs per Passenger TripLowest Among Major Cities*

Dollars

Exhibit 14


San Diego

Average

$1.34

$0.64

$0.00 $0.50 $1.00 $1.50 $2.00

ColumbusNew YorkSan Jose

IndianapolisSan Francisco

AustinAverageChicago

JacksonvilleSan Antonio

PhoenixHouston

PhiladelphiaLos Angeles

DallasSan DiegoSan Diego


San Diego MTS per Mile CostHalf Major City Average*

Dollars

Exhibit 15


Average

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CHANNELS OF INFLUENCE

The San Diego MTS affects the economy through a number of channels that combine to impact

the region’s total output, income, jobs, and environment. These channels are the following:

MTS employees and compensation

In FY 2018, MTS employed 1,580 workers with a total payroll of $131 million. Another 1,365

people worked to provide bus service under contract with MTS. The agency is thus one of the

region’s major employers with a total workforce of 2,945 individuals. These represent a

significant source of both household income and spending.

1,5801,365

2,945

0

1,000

2,000

3,000

MTS Contractors Total

Exhibit 16

MTS and Contractors EmployNearly 3,000 Workers

Fiscal Year 2018

Source: SDMTS; FBEI

Services and Supplies

MTS feeds into the local economy directly through its purchase of various goods and services.

Some of this spending, such as for fuel and tires that are not produced in San Diego, has little

impact on the regional economy. The majority of outlays supports local businesses. This

spending encompasses such areas as security, equipment repair and maintenance,

contracted transportation services, and utilities. In FY 2018, MTS spending on services and

supplies directly supporting San Diego’s economy equaled an estimated $109 million.

Capital Spending

Each year MTS invests in system upgrades and/or expansion. This includes its bus and trolley

systems, as well as its information technology networks. In FY 2018, the Courthouse Station

in downtown San Diego was completed. This marked the first opening of a new San Diego

trolley station since 2005.

In FY 2018, MTS capital outlays totaled $84 million. Because railcars and other items are not

manufactured locally, they are purchased from outside the San Diego region. For this reason,

total MTS spending on infrastructure and other capital spending directly impacting the region

accounts for about one-third of the total. In FY 2018, MTS capital spending directly affecting

the region totaled an estimated $27 million.

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Consumer Savings

Public transit can produce significant

savings for households. The

American Public Transportation

Association (APTA) publishes

monthly estimates on the annual

average savings across U.S. cities.

These savings reflect the difference

between transit fares and driving

costs, including the expense of

gasoline together with outlays for car

financing, insurance, maintenance

and repair. In April 2019, monthly

savings for San Diego MTS users

averaged about $930 a month or

approximately $11,200 per year.

In addition to the savings that commuters and other regular users of rapid transit realize, older

and disabled individuals who cannot drive have a transportation resource that typically is less

expensive than alternatives. The Special Access program of MTS, in particular, serves the

disabled through its paratransit network. Without this service, many individuals would have to

pay for taxi or shared-ride transportation.

In FY 2018, total savings accruing to San Diego MTS users totaled an estimated $861 million.

These savings went primarily to lower income households who represent the majority of MTS

riders.

Business Benefits

Rapid transit can benefit companies through improving their access to workers, expanding

their markets, or boosting productivity. Employees finding housing in less expensive outlying

areas can avoid the time and strain of congested commutes by car. Retailers may have more

ready access to customers. Companies can realize productivity gains with less tardiness and

employees who arrive at work under less stress.

MTS offers ECO Pass, which gives San Diego businesses an annual discount for purchasing

monthly bus and trolley passes for their employees. In FY 2018, nearly 47,000 passes were

purchased. Various companies in downtown San Diego through the Downtown Partnership

participated in the program. Other major employers participating included the City of San

Diego, Evans Hotels, Hotel Del Coronado, the San Diego Marriott Hotel, the San Diego

Unified School District, Scripps Health Care, Sharp Health Care, and the University of

California San Diego.

The total value of productivity gains for San Diego employers significantly utilizing MTS is

estimated at $688,000 for FY 2018.

$931

$11,172

0

2,000

4,000

6,000

8,000

10,000

12,000

Monthly Savings Annual Savings

Exhibit 17

San Diego Transit Users SaveOver $11,000 per Year

Dollars

Source: APTA; FBEI

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Tourism

MTS supports San Diego’s tourist

industry by providing transportation for

major conventions, sporting events,

and various holiday and other special

stagings. In FY 2018, MTS provided

381,000 trips for Comic-Con attendees.

Baseball fans took 280,000 trips to see

Padres games during the season.

The MTS trolley system was a transit

preference for many attendees to

various events held at the SDCCU

Stadium in FY 2018. Buses and trolleys

also accommodated a wide range of special events, such as the Big Bay Boom on July 4th.

The total net value of transportation services supplied to the tourist industry by San Diego’s

MTS is estimated at $10.0 million in FY 2018.

Cross-Border Transit

MTS provides a critical link between San Diego and Mexico. San Diego’s economy relies

heavily on workers from Mexico, particularly in such areas as construction, restaurants, hotels,

and landscaping.

MTS trolley trips from San Ysidro averaged approximately 11,000 per day in FY 2018. MTS

buses ran about 5,700 trips out of San Ysidro per day and another 2,300 daily trips out of

Otay Mesa. More than one-half of all individuals crossing the border use MTS services.3

Businesses in National City, downtown San Diego, and other parts of the region benefit from

the lower transportation costs and greater accessibility to employees. This cross-border direct

dollar savings equaled an estimated $53 million in FY 2018.

11,000

5,700

2,300

0

3,000

6,000

9,000

12,000

San Ysidro Trolley Bus

Otay Mesa:

8,000

Exhibit 19

Source: SDMTS; FBEI

MTS Meets Cross-Border DemandPassenger trips, Fiscal Year 2018

San Ysidro:

3 San Diego MTS, Community Impact and Performance Report, 2018.

381,000

280,000

0

100,000

200,000

300,000

400,000

Comic-con Padres Games

Exhibit 18

Source: SDMTS; FBEI

MTS Supports Tourism IndustryPassenger trips, Fiscal Year 2018

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Safety

Traffic accidents cause death, injury, and property damage or loss. In calendar year 2018,

more than 11,000 auto accidents occurred in the City of San Diego. Sixty-three people were

killed, while nearly 6,000 more were

injured. Another 5,400 car crashes

occurred.

In addition to what can be severe

personal loss, car crashes inflict

significant economic damage. These

economic costs encompass income

losses as well as the expense of health

care, rehabilitation, and car repair or

replacement. In FY 2018, MTS

achieved safety savings for its users of

$6.1 million.

Real Estate Development

It would seem that properties with a close proximity to a transit station or transit hub might

offer a greater economic potential for a developer versus another project further away or one

without access to public transportation. However, in the absence of special incentives, does

the presence of available transit significantly impact a developer’s decision to build houses,

condos, an apartment complex, an office complex, or a retail center?

Most of the research on the economic relationship between development and transit has

focused on the increase or decrease in residential and commercial land values, property

values, and/or rents based on proximity to a transit station. This literature points out that

transit systems can affect property values both positively (increased accessibility) and

negatively (noise, pollution, and crime)4. One study that focused on San Diego’s light and

commuter rail concluded that rail transit services do provide land-value benefits to residential

and commercial properties, but the impacts on values are corridor- and land-use specific.5

There have been some general documented impacts to indicate that this finding holds true for

other cities as well:

Philadelphia – Home values increase 6.4% for homes near train stations.

Washington D.C. – Housing prices rise 2.4% to 2.6% for every tenth of a mile closer to a

D.C. Metro station.

San Francisco – Home prices increase from $1,578 to $2,300 for every 100 feet closer

to a BART station based on different neighborhoods.

4 Kilpatrick, Throup, Carruthers, and Krause, The impact of Transit Corridors on Residential Property Values, 2007. 5 Cevero, Effects of Light and Commuter Rail Transit on Land Prices: Experiences in San Diego County, 2004.

5,396

5,932

63

Other Accidents

Injured

Killed

Exhibit 20

Auto Accidents Take a Tollon San Diego

Number, City of San Diego, 2018

Source: SDPD; FBEI

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Multi-city – Across a five-city average, rents rise $19 a month and houses show a

premium of $4,972 as one moves from three miles to one mile closer to a transit station.

St. Louis – Home prices rise $140 for every 10 feet closer to a transit station.6

Many projects, such as those in downtown San Diego, might well have been developed even

in the absence of a transit hub. However, FBEI did model the Villa Encantada development on

the underutilized parking lot at the MTS Encanto station (505 62nd Street and Imperial)

because this project is taking place on MTS property. The construction value of this

development attributed to its proximity to the MTS station was estimated at $2.25 million for

FY 2018.

Environment

Public transit can have significant

effects in reducing the region’s carbon

footprint. Because public transportation

produces lower greenhouse (GHG)

emissions than autos it can provide a

major way for the region to achieve its

Climate Action Plan goals.

Over two-thirds of the fleet of over 800

MTS buses are currently powered by

compressed natural gas (CNG). This

fuel emits 30% less GHG into the atmosphere compared with diesel. Approximately another

100 buses rely on propane, which also has a low GHG emission factor.

In FY 2018, public usage of San Diego’s MTS meant that over 400 million fewer miles were

driven than would otherwise have taken place. As a result, carbon dioxide (CO2) emissions,

which are the primary source of GHG, were reduced by 97,000 metric tons. In dollar terms,

this environmental savings amounted to $13.6 million.

Exhibit 22

Source: EPA; Interagency Working Group on Social Cost of Greenhouse Gases, U.S. Government; FBEI

MTS Climate SavingsFiscal Year 2018 estimate

Fewer Miles Driven 403 million

CO2 Reduction

Dollar Value

97,000 metric tons

$13.6 million

6 Kilpatrick et al.

587

103

24

113

0

100

200

300

400

500

600

CNG Propane Diesel Gas

Exhibit 21

Source: SDMTS; FBEI

San Diego’s Bus Fleet Shiftsto Cleaner Fuel Sources

Number of buses, 2019

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THE TOTAL ECONOMIC IMPACT

The impact of dollars most closely linked to

the MTS budget is only the starting point for

measuring the impact on San Diego. Two

additional dimensions are important.

First, supply chain, or business-to-business,

effects are significant. For example, once a

firm receives a contract to build a new trolley

line or transit station or to repair equipment,

it will need to purchase materials, engage

subcontractors, and hire employees to carry

out the work.

Second, consumer spending will receive a boost. Workers employed by the primary contractors

plus those benefiting along the supply chain will spend a part of their related earnings on

various goods and services produced in San Diego.

Accounting for the supply chain and consumption effects means that each dollar of MTS-related

expenditures goes further than its face value in creating jobs, income, regional gross regional

product (GRP), and total business sales.

$348

$73

$1,148

$1,569

0

500

1,000

1,500

2,000

DirectEffect

Supply Chain Effect

ConsumerEffect

TotalSales

Exhibit 24

MTS Direct Effects Expand Beyond Starting Point

Millions of dollars, Fiscal Year 2018 estimate

Source: FBEI

The total dollars related to MTS represent an important economic driver in the economy. It

should be noted that some of this spending would have taken place in the absence of MTS,

primarily by other transportation modes. Important effects, such as safety and the environment,

would have been absent. This analysis focuses on the total size and scope of San Diego’s MTS

as it currently influences the region’s economy.

Exhibit 23

MTS Channels are WidespreadMillions of dollars, Fiscal Year 2018

Compensation $ 131.2

Services and Supplies $ 109.5

Capital Spending $ 27.3

Consumer Savings $ 861.3

Business Benefits $ 0.7

Tourism $ 10.0

Cross Border Transit $ 53.1

Safety $ 6.1

Real Estate Development $ 2.3

CO2 Reduction $ 13.6

Source: SDMTS; FBEI

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In FY 2018, incorporating all of the ripple or multiplier effects, San Diego’s MTS was responsible

for nearly 13,000 of the total number of jobs existing in the County. These jobs yielded about

$625 million in income or earnings for wage and salary workers and for various small business

owners. The total impact of MTS-related spending generated an estimated $1.0 billion of output

or GRP in the San Diego region in FY 2018.

Exhibit 25

MTS Budget $ 317 million

Jobs 12,900

Income $ 626 million

Gross Regional Product $ 1.0 billion

CO2 Reduction $ 13.6 million

MTS Represents SizableEconomic Force

Fiscal Year 2018 estimate

Source: FBEI

MTS budget outlays show an impressive return in terms of their economic impact. The agency’s

operating expenses and capital spending during FY 2018 totaled $364 million, while it

contributed directly or indirectly to a total GRP impact of $1.0 billion. This means that every

dollar of direct MTS spending yielded a total of approximately $2.82 in GRP.

$1.00

$2.82

MTS Operationsand Capital Spending

GRP

Exhibit 26

MTS Returns $2.82 per DollarFiscal Year 2018 estimate

Source: SDMTS; FBEI

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CONCLUSIONS

San Diego MTS is an important economic force in the region. It has a sizable impact through a

number of channels, ranging from infrastructure spending, consumer savings, and tourism to

business productivity and cross-border transit. It contributes significantly to greater safety in

transportation and to the region’s Climate Action Plan objectives. MTS also contributes

meaningfully to the region’s total employment, personal income, and GRP.

Along with the rest of the nation, ridership has slipped in recent years. Some of this is due to an

improving economy and oil prices that are off their earlier peaks. The trolley’s expansion in San

Diego could help revive ridership.

The availability of convenient public transit has become a major factor in determining the

competitiveness of cities as companies look for areas to start new ventures or expand existing

operations. It is also an important factor for many potential employees.

San Diego MTS represents a major source of support for the region’s lower income households

as well as a diverse range of ethnic groups. It serves college students who are financially

burdened with the cost of housing and student debt. It provides a vital link between businesses

and individuals crossing the border for work. It also enables large conventions like Comic-Con

that might otherwise not be feasible.

In order to reduce GHG emissions, the role of MTS could be expanded. For many San Diego

households it could become a primary option for transportation rather than the last. Businesses

could do more to encourage their employees to take public transit. Hotels, entertainment, and

sports venues could boost the awareness and attractiveness of public transit. Private and public

schools could encourage more MTS ridership among their student bodies.

San Diego’s MTS already plays an important role in the economy. It could become an even

more vital cog in the region.

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APPENDICES

Appendix A: Methodology

To assess the total economic impact of MTS on the San Diego region (San Diego County), each

of its primary channels of influence was quantified and or estimated for FY 2018.

Compensation: Total compensation figures and full-time equivalent employee (FTE)

counts were based on revised figures from the MTS FY 2019 Adopted Budget and

MTS payroll records.

Services and Supplies: FY 2018 spending on security, repair and maintenance, the

rebuilding of engines or transmissions, tires, CNG, traction power, contracted bus

service, utilities, and other goods and services, was obtained from the MTS FY 2019

Adopted Budget. FBEI estimated the shares of spending that would accrue to San

Diego firms based on the capacity of local industries.

Capital Spending: The cash flow segment of capital investment for FY 2018 was

obtained from MTS. Based on an analysis of companies receiving MTS contracts,

shares of capital spending directed at San Diego firms were estimated at 80% for

construction projects and 45% for equipment.

Consumer Savings: The number of regular MTS riders for FY 2018 was estimated

based on the number of monthly passes used and the average number of working or

transit days per year. APTA figures were used for the annual savings estimated for a

San Diego household using public transit. The savings for Special Access riders were

calculated by using an estimate of what a typical ride would cost using a shared ride

service such as Uber. Total cost savings for both regular MTS and Special Access

users were analyzed as equivalent to income gains and allocated across households

based on the income distribution of MTS riders.

Business Benefits: The impact on business productivity and the value of MTS service

to enterprises was based on those organizations who purchased the MTS ECO Pass

in FY 2018. The total value of MTS business benefits was estimated as the cost of the

ECO Pass plus the return enterprises would expect on a similar investment. The cost

of capital for non-financial firms was estimated at 8.22% as published by the NYU

Stern School of Business.

Tourism: Ridership trip counts for FY 2018 for such events as Comic-Con, Padres

games, and the Big Bay Boom were obtained from MTS. FBEI calculated the

difference between the cost of using MTS for such events and the cost of driving and

parking or using taxis or shared ride services. These base numbers were adjusted to

estimate the impact on all conventions, special events staging, or sporting events that

are partly served by MTS and allocated to restaurants and other segments of tourism.

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Cross-Border Transit: Daily trolley and bus passenger trip counts from San Ysidro and

Otay Mesa were secured from MTS and converted to annual counts. The cost of using

MTS per year with a combination of monthly and daily passes was estimated. That

cost was then compared to the annual cost of driving based on the estimated number

of miles per trip and cost per mile. Per mile costs were based on published IRS

calculations. Savings were allocated to different business segments, such as

construction, tourism and landscaping, to represent the savings in compensation or

access to workers for firms dependent on cross-border employees.

Safety: Data from the San Diego Police Department (SDPD) was used to source the

number of traffic fatalities, injuries, or other car accidents for calendar year 2018 for

the City of San Diego. The economic cost of each type of accident was based on

research from the National Safety Council and then adjusted for inflation. The cost

savings from the increased safety afforded by public transit ridership was adjusted to

reflect the entire area served by MTS and was allocated across households based on

the income distribution of MTS users.

Real Estate Development: Villa Encantada is the redevelopment of an underutilized

parking lot next to an Orange Line trolley station in the Encanto neighborhood. The

project broke ground in February 2017 and was completed in the summer of 2018. The

total project development costs were $27 million with 50% of these costs considered as

costs for actual construction materials and labor hard costs ($13.5 million). Since two-

thirds of the development occurred in FY 2018, these hard costs were then multiplied by

two-thirds for a total of $9.0 million. This amount was further reduced by 75% to reflect

the impact of proximity to a transit station for a total economic impact of $2.25 million.

CO2 Reduction: To calculate the value of a reduction in CO2 emissions, U.S. Department

of Transportation (DOT) numbers were used to estimate the reduction in the number of

pounds of carbon per passenger mile over various forms of public transit relative to cars.

The reduction for San Diego’s MTS was based on the ridership on trolleys versus buses,

the composition of the MTS bus fleet by fuel source, and the emission factors for

different fuel types as published by the U.S. Environmental Protection Agency (EPA).

The total estimate of the reduction in car miles driven was then calculated from the total

number of MTS passenger trips in FY 2018 and the average length of each of those

trips. Carbon savings were converted from pounds to metric tons. The price of CO2

savings per metric ton was taken from estimates provided by the U.S. Interagency

Working Group on Social Cost of Greenhouse Gases and then adjusted for inflation.

The IMPLAN® model was used to analyze the total economic impact of MTS. This is a widely

used model to evaluate the various ripple or multiplier effects of an increase in spending on a

region’s sales, output, and income. These ripple effects encompass two stages: supply chain

and consumer effects. The supply chain effects reflect the impact on other businesses when a

local firm has to purchase additional goods or services to support its own increase in sales or

activity. The consumer effects refer to the increase in household outlays due to the gain in jobs

and income created by the direct impact of the increase in spending as well the effects along

the supply chain.

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For the purpose of modeling all of the channels affecting various economic sectors, the

incremental effects on business sales were divided into various industry categories. These

included construction firms, transportation providers, equipment servicing and repair

businesses, security firms, hotels, restaurants, various retailers, entertainment and sporting

venues, transportation, and other relevant categories. The cost savings from the reduction in

driving expenses and the increased safety afforded by public transit ridership were allocated

across households based on the income distribution of MTS users.

Adjustments were made to account for inflation and to convert the results into 2018 dollars.

Simulations were then run to obtain the direct, indirect, and total impact of MTS on the area’s

total sales, gross regional product (GRP), and income.

Appendix B: Literature Review

Summary: A significant number of reports and studies have been done that address the

impacts of public transportation on various social and economic issues,

encompassing a wide range of local, state, and federal perspectives. A

sampling of these documents were reviewed for this report with

corresponding summaries provided. A few of the key findings that are

noteworthy for San Diego are as follows:

The Moovit Public Transit Index collection of over five billion data

points per day finds San Diego comparable to the San Francisco

Bay Area, Los Angeles, and New York City regarding average

time riding public transportation, average wait time, average

distance for a single trip, number of riders with at least one

transfer, and the average distance walked to work or home.

A ratio analysis of an American Public Transportation Association

study showing the impact on business sales, wages, jobs, and

gross domestic product (GDP) resulting from a $1 billion national

investment in public transportation yields similar results to the

calculations done in this study when the input is scaled to the

$317 million MTS budget.

Equitable Transit-Oriented Development (TOD) is emerging as a

top issue for localities. Equitable TOD seeks to ensure that

residents of all incomes and backgrounds can afford to live near

and use public transportation services, as opposed to driving

lower income residents further out.

Other studies reviewed discuss the contribution of public transportation to

agglomeration, rents, jobs, auto congestion, travel/commute times, residential and

commercial property values, and environmental protection.

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I. Moovit Insights Public Transit Index

https://moovitapp.com/insights/en/Moovit_Insights_Public_Transit_Index-582#

The Moovit Public Transit index measures how much people in San Diego use public

transit compared to other cities. Their index utilizes approximately five billion anonymous

data points a day that are added to the database. This database is the largest in the

world and collects information from thousands of different cities.

According to the index, San Diego has four transit type(s), including Light Rail, Train,

Bus, and Ferry, operated by several transit agencies, including MTS, North County

Transit District, the San Diego International Airport, and the University of San Diego

Tram Service.

Key Findings:

In San Diego, the average amount of time people spend riding public transit is 70

minutes. Over 71% of those riders spend more than 2 hours on public

transportation every day.

o This is comparable to New York City where the average transit time is 87

minutes, SF Bay Area where the average travel time is 77 minutes, and

Los Angeles where the average transit time is 86 minutes.

People who wait or stop at a station in San Diego wait on average 16 minutes,

but over 46% wait longer than 20 minutes.

o This is comparable to New York City – 15 minutes, SF Bay Area – 13

minutes, and Los Angeles – 20 minutes.

The average distance people ride in a single trip within San Diego is 6.96 miles.

Yet 74% of riders travel over 7.45 miles in a single direction.

o This is comparable to New York City (5.9 miles), SF Bay Area (5.65

miles), and Los Angeles (6.9 miles).

The percentage of public transit riders who transfer lines at least once in San

Diego is 55%. On average, 27% of riders transfer at least twice during a single

trip

o This is comparable with New York City (72%), SF Bay Area (58%), and

Los Angeles (71%).

In San Diego, the average distance people walk to work or home is 0.75 miles.

Approximately, 48% walk more than 0.62 miles to reach their destination.

o This is comparable with New York City (0.43 miles), SF Bay Area (0.47

miles), and Los Angeles (0.58 miles).

https://moovitapp.com/insights/en/Moovit_Insights_Public_Transit_Index-582

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II. Economic Impact of Public Transportation Investment. Glen Weisbrod. Arlee Reno.

American Public Transportation Association. (2009, October).

The purpose of this study was to learn how investment in public transportation affects

the economy in terms of employment, wages, and business income. The data used in

the study is pulled directly from two sources: Federal Transit Administration of the US

Department of Transportation and the American Public Transportation Association.

Through a calculation of indirect and induced (multiplier) impacts, the direct, indirect, and

induced impacts on jobs, income, and spending were found.

Key Findings:

Travel and vehicle ownership cost savings for public transportation passengers

and those switching from automobiles, leading to shifts in consumer spending;

Reduced traffic congestion for those traveling by automobile and truck, leading to

further direct travel cost savings for businesses and households;

Business operating cost savings associated with worker wage and reliability

effects of reduced congestion;

Business productivity gains from access to broader labor markets with more

diverse skills, enabled by reduced traffic congestion and expanded transit

services areas. Additional regional business growth enabled by indirect impacts

on supply chains and induced impacts on spending of worker wages. At a

national level, cost savings and other productivity impacts can affect

competitiveness in international markets.

Charts taken directly from the study:

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III. Transit Service, Physical Agglomeration and Productivity in U.S. Metropolitan Areas.

David Chatman. Robert Noland. Sage Journals. (2013, August).

Agglomeration can show the importance of how more jobs cluster in a city center as a

result of when more people collect in a city’ core, which boosts both wages and

economic productivity over time. According to this study, the key is public transportation.

The larger the labor force, which can be widened with public transportation, the better

chance an employer will have to match the needs of a job with the skills of a worker.

The researchers ran a number of statistical models that took into account factors such

as job density, population growth, and transit development, as well as economic

productivity measures and average wages. This was done over 300 metropolitan areas

across the United States. The results below are an average of all 300 metropolitan

areas.

Key Findings:

Every time a metro area added 4 seats to rails and buses per 1,000 residents,

the central city ended up with 320 more employees per square mile – an

increase of 19 percent in job availability.

Adding 85 rail miles delivered a 7% increase in employees.

A 10% expansion in transit service (by adding either rail or bus seats or rail

miles) produced a wage increase between $53 and $194 per worker per year in

the city center. The gross metropolitan product rose between 1 and 2 percent.

On average, across all the metro areas in the study, expanding transit service

produced an economic benefit via agglomeration of roughly $45 million a year –

with that figure ranging between $1.5 million and $1.8 billion based on the size of

the city.

IV. Can Public Transportation Increase Economic Efficiency? Matthew Drennan and

Charles Brecher. Access Magazine. (2012).

The purpose of this paper was to examine if public transportation can increase

agglomeration economics. The authors’ hypothesis was that office rents, as indicators of

efficiency gains from the presence of urban agglomeration economics, would be higher

in areas better served by mass transit. They claim that good mass transit enables large

numbers of skilled workers to live in or travel to a small area. Such concentrations in

workers increase the likelihood of agglomeration economies of two types:

1. Labor pooling: the high concentration of workers with specific skills in an area

2. Knowledge spillovers: the informal sharing of information among those engaged

in the same occupation, whether it be stonework or computer software.

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The study then asks the question: Do Central Business Districts (CBD) with high

concentrations of office space command higher rents because of higher public transit use?

Key Findings:

The answer to the question above is tentatively yes – but not by a large amount. For

those CBD’s with more than 30% of the total metropolitan office space, the effect of

transit use on rents is small but positive. By contrast, the results show that transit

use has no effect on office rents in places with a low concentration of office space in

the CBD. This means that public transit appears to increase office rents, but only for

places with a high concentration (above 30%) of office space in the CBD.

A 10% rise in transit use raises office rents by only 0.5%. Using the mean office rent

of $23.86 per square foot per year in 2007 for all markets, these percent changes

translate into rent gains of only 1 cent to 12 cents per square foot per year.

The policy implication is that rent gains from increasing transit ridership would be

a relatively small fraction of the cost of expanding public transit in metro areas

with a high concentration of space in the CBD.

V. Where the Jobs Are: Employer Access to Labor by Transit. Adie Tomer. Metropolitan

Policy Program at Brookings. (2012, July).

While automobiles do provide broad job accessibility, there is no guarantee the trip is

easy. The data in this study indicates the nation’s average distance to work jumped from

9.9 miles in 1983 to 13.3 miles in 2009. Meanwhile, as solo drivers topped 74 percent of

all commuters, the average number of hours spent in traffic increased from 14 hours in

1982 to 34 hours in 2010. Additionally, the high cost of owning and operating a vehicle

appears to be a primary reason that 10% of households in the U.S. do not have access

to a vehicle. Compared to their car-owning counterparts, zero-vehicle households are

more likely to earn low incomes, live in cities, and take public transportation to work.

For people who may own a car, but still be low income, there are significant problems

with the daily commute that affect workers and employers. The research done for this

study shows congestion geographically limits business markets, raises costs, and

reduces employee productivity. The study argues the case for public transportation as

the solution to these problems. It concludes that public transportation offers businesses

and workers an alternative to automobile congestion, while it takes cars off the road to

allow more space for commercial freight, transportation, and delivery.

The findings from this study indicate that the typical job is accessible to only 27% of the

metropolitan workforce by transit in 90 minutes or less. Additionally, labor access varies

considerably from a high of 64% in Salt Lake City, Utah, to a low of 6% in Palm Bay,

Florida, reflecting differences in transit availability, job concentration, and land use

patterns. This demonstrates that city jobs are consistently accessible to larger shares of

metropolitan labor pools than suburban jobs, reinforcing cities’ geographic advantage

relative to transit routing.

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VI. America’s commuting choices: 5 major takeaways from 2016 census data. Adie

Tomer. Brookings Institute. (2017, October). https://www.brookings.edu/blog/the-

avenue/2017/10/03/americans-commuting-choices-5-major-takeaways-from-2016-

census-data/

This article focuses on the largest takeaways from 2016 American Community Survey

Data (ACS):

American commuters are still largely depend on cars

o Over 76% of Americans drive alone to work every day, while another 9%

carpool with someone else. That means that at least 115 million cars and

trucks are on American streets every day. For comparison, 5.1% use

public transportation, 2.7% walk, and 5.0% work from home.

o Owning and maintain a private vehicle is the second highest average

expense after housing.

Nationally, commuting shares are stubbornly persistent

o Looking at ACS data from 2007 and 2016, no transportation mode saw its

share of total commuters change more than 1.5%. Even with new roads,

widened roads, new transit lines, ride-hailing services, and bike share

systems, the same fundamental distribution of commuter choice has

prevailed.

o In 2016, transportation became the economy’s number one polluting

sector.

Cities are beginning to lead shifts away from driving

o 21 of the country’s 50 most populated cities experienced a significant

drop in driving. Seattle’s solo driving rate dropped below 50%.

Working from home continues its upward climb

o 32 out of the 50 largest cities in the nation realized a significant increase

in work from home sites

Better data is needed to capture the transportation patterns for different purposes

o Current research shows that ride-hailing spikes during off-peak

commuting hours, suggesting many users are not ride-hailing for work.

ACS data does not reflect the behavior of these individuals.

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VII. Communities Are Embracing Development near Transit: A Snapshot of Transit-Oriented

Development Support across the United States. Jana Lynott. AARP Public Policy Institute.

September 2017.

This study focuses on Transit-Oriented Development (TOD), which is one means of

creating sought after, economically vibrant neighborhoods. TODs include a mixture of

housing, office, retail, and/or other commercial development and amenities integrated

into a walkable neighborhood and located within a half mile of quality public

transportation. They are intended to boost ridership, reduce traffic and vehicle

emissions, and encourage active lifestyles.

Key Findings:

TOD benefits from strong support from multiple community segments. These

include, in particular, regional transit agencies that use their real estate assets to

catalyze development near transit as well as metropolitan planning organizations

that are taking the lead in drawing up model TOD zoning district templates or

design guidelines that localities can adopt within their own policy and regulatory

frameworks.

TOD requires complex funding and partnerships. Metro Transit in the Twin Cities,

for example, has identified more than 70 federal, state, local, and private grants

and financing opportunities for TOD development, many of which have been

tapped to build TOD neighborhoods around the region’s three new Metro light rail

and Bus Rapid Transit (BRT) lines.

Equitable TOD is emerging as a top issue for localities. Transit rich

neighborhoods can often increase the price of housing in the surrounding

neighborhoods, thus pushing lower income residents out. Equitable TOD seeks

to ensure that residents of all incomes and backgrounds can afford to live near

and take advantage of high frequency public transportation services and other

neighborhood amenities.

VII. APTA Economic Impact of Public Transportation Investment. (2009).

A statistical study of residential property values in Buffalo, NY, examined how values

varied for properties within one-half mile of light rail transit stations. It found that every

foot closer to a light rail station increased average property values by $2.31 (using

geographical straight-line distance) and $0.99 (using network distance). Consequently, a

home located within one-quarter of a mile radius of a light rail station can earn a

premium of $1,300-$3,000 (Hess, 2007).

Studies over two decades show average housing value premiums associated with being

near a station (usually expressed as being within 1⁄4 to 1⁄2 mile of a station) are 6.4% in

Philadelphia, 6.7% in Boston, 10.6% in Portland, 17% in San Diego, 20% in Chicago,

24% in Dallas, and 45% in Santa Clara County. These numbers reflect specific locations

in each metropolitan area. (Cervero et al, 2004).

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A review of experiences in the San Francisco Bay Area study found that for every meter

closer a single-family home was to a BART station, its sales price increased by $2.29, all

else being equal. Alameda County homes near BART stations sold, on average, for 39%

more than otherwise comparable ones 20 miles from the nearest station (Cervero et al,

2004).

A detailed study conducted by researchers at the University of Toronto in 2000 indicated

that proximity to a subway station in Toronto generated approximately $4,000 in

additional residential property value for a home with a value of $225,000. (Canadian

Transit Association, 2003)

A study of the DART system compared differences in land values of “comparable” retail

and office properties near and away from light rail stations. The average change in land

values from 1997 to 2001 for retail and residential properties near DART stops was 25%

and 32%, respectively; for “control” parcels, the average changes were 12% and 20%

(Weinstein and Clower, 2003).

Studies found that with routes that are more direct with more frequent service, time

saved for the existing and new public transportation passengers helps businesses. This

is even more beneficial in dense, urban areas as it can help reduce traffic congestion.

Business productivity rises as employees become more time efficient and reliable, which

theoretically increases their ability to do business. The authors found that with proper

public transportation, $11 billion per year of congestion cost savings could occur, with

55% of the money going to households and 45% going to businesses.

VIII. DART Transit Economic Impact study - The Economic and Fiscal Impacts of

Development near DART Stations. (2017).

Researchers studied four DART LRT stations in the Dallas Central Business District.

Since the opening of DART light rail service, gross retail sales increased 36.2% from the

fiscal year beginning in the third quarter of 1996 compared with FY 1997. Gross retail

sales for the rest of the city of Dallas rose only 3.6% during the same time frame.

Public development near DART stations:

Had a direct property value impact of $1.81 billion with an indirect impact of

$682.9 million

Produced an economic impact of $3.36 billion for the Dallas-Fort Worth region

Created 20,741 construction jobs in the Dallas-Fort Worth region

Created $1.3 billion in employee compensation

Generated $105 million in state and local taxes and $278 million in federal tax revenue

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IX. The Economic Impact of the Metropolitan Atlanta Rapid Transit Authority (MARTA). (2007)

Key findings regarding economic development around Atlanta’s transit hubs:

Employment by industry - If MARTA would have ceased operations in 2001 the

Atlanta area would have experienced approximately 19,600 fewer jobs in 2001,

and by 2055, the city would have seen 45,500 fewer jobs.

Gross regional output by industry - MARTA’s presence in Atlanta accounted for

approximately $2.0 billion in the region in 2001, 0.6% of the regional economy.

By 2055, MARTA is expected to account for more than $10.3 billion worth of

Atlanta’s total sales.

Real disposable personal income per capita by region - MARTA’s presence in

Atlanta generated approximately $52 per Atlanta-area resident in 2001. By 2055,

MARTA’s presence could generate over $224 per Atlanta-area resident

X. New Hampshire Economic Impact of Passenger Rail Expansion along the New

Hampshire Capital Corridor. (2010).

Key findings regarding the impact on businesses productivity of reduced travel times:

Changes in vehicle hours and vehicle-miles of travel were used to estimate

changes in travel time, vehicle operating cost, and accident rates. Those

effects were then used to estimate the dollar value of total user (time and

operating) costs for the affected mix of rail and highway users.

Key findings regarding impact on business with increased access to workers:

Expanded labor market access has the effect of increasing competitiveness and

productivity, thereby expanding output and employment. The economic impact

model assessed this effect by estimating the additional workers available in the

study area within a 40-minute travel time. Considering both the highway congestion

relief and the resulting improvement in travel speed compared to peak-period car

use, the researchers estimated a labor market expansion effect of 5,000 workers.

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XI. The Southeastern Pennsylvania Transportation Authority (SEPTA) Drives the Economy

of Pennsylvania. (2019, May 01).

A regression model was estimated using data from over 315,115 transactions of single-

family homes in the five counties.

Key findings:

Access to transit helps increase home values. Access to SEPTA service

contributes a premium of $33 billion in housing value, representing 11% of total

housing value in southeastern PA.

In aggregate, SEPTA’s rail service adds $14.5 billion in residential property value

across Bucks, Chester, Delaware and Montgomery counties.

Transit helps reduce household expenses. In the City of Philadelphia, the average

household saves $830 per year, a net financial benefit associated with proximity to

high-quality transit. These annual household savings add up to $481 million citywide.

SEPTA’s capital investments generate $3.05 billion in economic impact within

Pennsylvania each year, supporting more than 23,070 jobs and more than

$1.715 billion in earnings.

XII. Public Transportation Helps Protect Our Environment. American Public Transportation

Association. http://www.capecodtransit.org/downloads/environment_fact_sheet.pdf

This study discusses the importance of public transportation and how it plays a

significant role in finding smart solutions to the environmental challenges facing the

nation today. Below are some key findings from the study:

Public transportation saves 37 million metric tons of carbon dioxide annually –

equivalent to the emissions resulting from the electricity generated for the use of

4.9 million households.

If an individual switches a 20-mile roundtrip commute to public transportation, the

annual CO2 emissions will fall by 4,800 pounds per year, equal to a 10%

reduction in a two-car household’s carbon footprint.

Public transportation offers an immediate alternative for individuals seeking to

reduce their energy use and carbon footprints. Taking public transportation far

exceeds the combined benefits of using energy-efficient light bulbs, adjusting

thermostats, weatherizing one’s home, and replacing a refrigerator.

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